2 Semester Cengage Now, Warren Accounting
26th Edition
ISBN: 9781305662308
Author: WARREN
Publisher: Cengage
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Chapter 24, Problem 24.2BPE
To determine
Service department charges: These are the indirect expenses incurred by profit center. These are charged for the services received by the department or division, based on the activity base of the service department.
The travel service charges to be charged for R Division and C Division
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Service Department Charges
The centralized computer technology department of Hardy Company has expenses of $153,600. The department has provided a total of 9,600 hours of service for the period. The Retail Division has used 4,032 hours of computer technology service during the period, and the Commercial Division has used 5,568 hours of computer technology service.
How much should each division be charged for computer technology department services? Do not round interim calculations.
Retail Division
$
Commercial Division
$
The centralized computer technology department of Lee Company has expenses of$264,000. The department has provided a total of 2,500 hours of service for the period. TheRetail Division has used 1,125 hours of computer technology service during the period, andthe Commercial Division has used 1,375 hours of computer technology service. How mucheach division should be charged for computer technology department services?
The centralized computer technology department of Hardy Company has expenses of $61,600. The department has provided a total of 7,700 hours of service for the period. The Retail Division has used 6,083 hours of computer technology service during the period, and the Commercial Division has used 1,617 hours of computer technology service.
How much should each division be allocated for computer technology department services? Do not round interim calculations.
Retail Division
$fill in the blank 1
Commercial Division
Chapter 24 Solutions
2 Semester Cengage Now, Warren Accounting
Ch. 24 - Differentiate between centralized and...Ch. 24 - Differentiate between a profit center and an...Ch. 24 - Prob. 3DQCh. 24 - What is the major shortcoming of using income from...Ch. 24 - In a decentralized company in which the divisions...Ch. 24 - How does using the return on investment facilitate...Ch. 24 - Why would a firm use a balanced scorecard in...Ch. 24 - What is the objective of transfer pricing?Ch. 24 - When is the negotiated price approach preferred...Ch. 24 - When using the negotiated price approach to...
Ch. 24 - Budgetary performance for cost center Caroline...Ch. 24 - Budgetary performance for cost center Conley...Ch. 24 - Prob. 24.2APECh. 24 - Prob. 24.2BPECh. 24 - Prob. 24.3APECh. 24 - Prob. 24.3BPECh. 24 - Profit margin, investment turnover, and ROI Cash...Ch. 24 - Profit margin, investment turnover and ROI Briggs...Ch. 24 - Prob. 24.5APECh. 24 - Residual income The Commercial Division of Herring...Ch. 24 - Transfer pricing The materials used by the North...Ch. 24 - Transfer pricing The materials used by the...Ch. 24 - Budget performance reports for cost centers...Ch. 24 - Prob. 24.2EXCh. 24 - Prob. 24.3EXCh. 24 - Prob. 24.4EXCh. 24 - Service department charges In divisional income...Ch. 24 - Service department charges and activity bases...Ch. 24 - Divisional income statements with service...Ch. 24 - Prob. 24.8EXCh. 24 - Profit center responsibility reporting XSport...Ch. 24 - Rate of return on investment The income from...Ch. 24 - Prob. 24.11EXCh. 24 - Determining missing items in return computation...Ch. 24 - Profit margin, investment turnover, and rate of...Ch. 24 - Prob. 24.14EXCh. 24 - Determining missing items in return and residual...Ch. 24 - Determining missing items from computations Data...Ch. 24 - Prob. 24.17EXCh. 24 - Balanced scorecard for a service company American...Ch. 24 - Building a balanced scorecard Hit-n-Kun Inc. owns...Ch. 24 - Decision on transfer pricing Materials used by the...Ch. 24 - Prob. 24.21EXCh. 24 - Budget performance report for a cost center...Ch. 24 - Prob. 24.2APRCh. 24 - Prob. 24.3APRCh. 24 - Effect of proposals on divisional performance A...Ch. 24 - Divisional performance analysis and evaluation The...Ch. 24 - Prob. 24.6APRCh. 24 - Budget performance report for a cost center The...Ch. 24 - Prob. 24.2BPRCh. 24 - Prob. 24.3BPRCh. 24 - Effect of proposals on divisional performance A...Ch. 24 - Divisional performance analysis and evaluation The...Ch. 24 - Prob. 24.6BPRCh. 24 - Prob. 24.1CPCh. 24 - Prob. 24.2CPCh. 24 - Evaluating divisional performance The three...Ch. 24 - Prob. 24.4CPCh. 24 - Evaluating division performance Last Resort...
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- The centralized computer technology department of Hardy Company has expenses of $320,000. The department has provided a total of 4,000 hours of service for the period. The Retail Division has used 2,750 hours of computer technology service during the period, and the Commercial Division has used 1,250 hours of computer technology service. How much should each division be allocated for computer technology department services? Do not round interim calculations. Retail Division $fill in the blank 1 Commercial Division $fill in the blank 2arrow_forwardThe centralized computer technology department of Hardy Company has expenses of $320,000. The department has provided a total of 4,000 hours of service for the period. The Retail Division has used 2,750 hours of computer technology service during the period, and the Commercial Division has used 1,250 hours of computer technology service. Additional data for the two divisions is following below: Retail Division Commercial Division Sales $2,150,000 $1,200,000 Cost of goods sold 1,300,000 800,000 Selling expenses 150,000 175,000 Determine the divisional income from operations for the Retail Division and the Commercial Division. Do not round interim calculations. Hardy Company Divisional Income from Operations blank Retail Division Commercial Division $- Select - $- Select - - Select - - Select - $- Select - $- Select - - Select - - Select - $- Select - $- Select - - Select - - Select - Income from operations $fill in the blank 19 $fill in the blank 20 Check My Work PreviousNextarrow_forwardSupport Department Allocations The centralized computer technology department of Hardy Company has expenses of $242,000. The department has provided a total of 11,000 hours of service for the period. The Retail Division has used 8,250 hours of computer technology service during the period, and the Commercial Division has used 2,750 hours of computer technology service. How much should each division be allocated for computer technology department services? Do not round interim calculations. Retail Division ? Commercial Division ?arrow_forward
- Service Department Allocations The centralized computer technology department of Crutchfield Company has costs of $982,500. The department has provided a total of 13,100 hours of service for the period. The Retail Division has used 5,900 hours of computer technology service during the period, and the Commercial Division has used 7,200 hours of computer technology service How much should each division be allocated for computer technology department services? Retail Division Commercial Divisionarrow_forwardService Department Charges The centralized employee Travel Department of Vital Company has expenses of $414,700. The department has serviced a total of 14,300 travel reservations for the period. The South Division has made 7,722 reservations during the period, and the West Division has made 6,578 reservations. How much should each division be charged for travel services? Do not round interim calculations. South Division $ West Division $arrow_forwardThe centralized computer technology department of Crutchfield Company has costs of $982,500. The department has provided a total of 13,100 hours of service for the period. The Retail Division has used 5,900 hours of computer technology service during the period, and the Commercial Division has used 7,200 hours of computer technology service. Additional data for the two divisions is following below: RetailDivision CommercialDivision Sales $6,320,000 $4,950,000 Cost of goods sold 3,190,000 2,220,000 Selling expenses 502,000 489,000 Determine the divisional income from operations for the Retail Division and the Commercial Division. Crutchfield Company Divisional Income from Operations RetailDivision CommercialDivision Sales $fill in the blank 2 $fill in the blank 3 Cost of goods sold fill in the blank 5 fill in the blank 6 Gross profit $fill in the blank 8 $fill in the blank 9 Selling expenses fill in the blank 11 fill in the blank 12 Income…arrow_forward
- State Financial Corp. has three service departments (Administration, Communications, and Facilities), and two production departments (Deposits and Loans). A summary of costs and other data for each department prior to allocation of service department costs for the year ended December 31 follows. Administration Communications Facilities Deposits Loans Direct costs $ 210,000 $ 320,000 $ 253,000 $ 7,590,000 $ 5,400,000 Employee hours 21,000 31,000 21,000 416,000 357,000 Number of employees 8 17 7 190 160 Square footage occupied 4,600 14,500 5,200 246,900 202,900 The costs of the service departments are allocated on the following bases: Administration, employee-hours; Communications, number of employees; and Facilities, square footage occupied. Required: a. Assume that the bank elects to distribute service department costs to production departments using the direct method. What amount of…arrow_forwardDunedin Bank has two operating departments (Retail and Commercial) and three service departments: Operations, Information Technology (IT), and Transactions. For the last period, the following costs and service department usage ratios were recorded: Supplying Department Transactions IT Operations Direct cost From: Transactions IT Operations Transactions Total 0 10% 50% $ 340,000 IT Using Department Operations Costs Operations $ 760,000 $ 228,000 $ 1,828,000 1,536,000 0 0 0 $760,000 Allocated to: Transactions 30% 0 $ 1,600,000 Retail Required: a. Allocate the service department costs to the two operating departments using the reciprocal method. 70% 30% 10% $ 3,800,000 Commercial Retail 76,000 $ 228,000 $ 228,000 914,000 182,800 731,200 1,075,200 460,800 $ 1,486,000 $ 1,420,000 Commercial 30% 30% 40% $ 2,350,000arrow_forwardeBook Service Department Charges In divisional income statements prepared for Iguana Construction Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll checks, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $46,248, and the Purchasing Department had expenses of $26,840 for the year. The following annual data for the Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial GovernmentContract Sales $561,000 $743,000 $1,707,000 Number of employees: Weekly payroll (52 weeks per year) 130 70 75 Monthly payroll 28 39 26 Number of purchase requisitions per year 2,600 1,800 1,700 a. Determine the total amount of payroll checks and purchase requisitions processed per year by each division and the company in total.…arrow_forward
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